Africa must prioritise domestic revenue mobilisation to triple growth —ECA
Marrakesh, Morocco - To meet their development goals and targets, African countries need to build resilient economies by prioritising domestic revenue mobilisation efforts while tripling current rates of growth, the Conference of Ministers have disclosed.
These were some of the takeaways from the Economic Commission for Africa, ECA, Conference of
Ministers, COM2019, which held in Marrakesh, Morocco.
The weeklong conference brought together policymakers who were also urged fast-track the digitalisation of their economies as a means of improving efficiencies, creating jobs and modernising systems and institutions.
An increase of 12-20% in tax collection can raise up to $400 billion and go a long way in funding $600 billion financing gap Africa faces. But that will also require fiscal prudence to strengthen a social compact between the government and its people.
Although the conference agreed that digitisation provides an opportunity to raise taxes as well as entrench greater transparency and better governance, they were also cautious about its challenges, in terms of what to tax and where to tax it, making it even easier to shift profits and compounding the estimated $50 billion loss the continent faces from illicit financial flows.
The African Continental Free Trade Area, AfCFTA, was also a key topic of discussion with the initiative now on the brink of being operationalised. This requires 22 countries to ratify the agreement and during the event, Ethiopia ratified it, bringing the total number to 21 countries.
The conference brings together African Ministers of Finance, Planning, and Economic Development or their representatives. This year it was held under the theme, 'Fiscal policy, trade and the private sector in the digital era: A strategy for Africa'.